Herbalife Ltd. (HLF), J.C. Penney Company, Inc. (JCP): George Soros Looks to Ignite Short Squeeze

In addition to the risks from Ackman’s stake, Canadian Pacific Railway Limited (USA) (NYSE:CP) stock is at risk because, as shown by the chart below, it is more expensive than other comparable railroad stocks. Furthermore, Canadian Pacific also has the lowest dividend yield of the major railroad stocks.

CP Forward PE Ratio data by YCharts

CP Dividend Yield data by YCharts

Conclusion

Shareholders of Herbalife Ltd. (NYSE:HLF), J.C. Penney Company, Inc. (NYSE:JCP), and Canadian Pacific Railway Limited (USA) (NYSE:CP) should keep a close eye on what is going on in all of these names because of the Ackman link. While these companies may not have much in common, their stocks do: Bill Ackman is a large investor and thus a major factor in determining price for these stocks. In my opinion, Soros’s goal here is to cause a massive short squeeze on behalf of Ackman in Herbalife, a name he now holds a significant position. Perhaps the most important thing to watch here is whether investors maintain confidence in Bill Ackman.

Sammy Pollack has no position in any stocks mentioned. The Motley Fool has the following options: long January 2014 $50 calls on Herbalife Ltd. (NYSE:HLF). 

The article George Soros Looks to Ignite Short Squeeze originally appeared on Fool.com.

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